Shares of Tata Power rallied nearly 7 per cent in intraday trade on the Bombay Stock Exchange on Tuesday after electric utility company said it has completed the acquisition of 51 per cent stake in TP Central Odisha Distribution Ltd (TPCODL) for Rs 178.5 crore.
Reacting to the news, Tata Power share price rose as much as 6.82 per cent to hit an intraday high of Rs 42.25 apiece on the BSE after opening higher at Rs 41.05 against previous close level of Rs 39.55.
In a similar trend, Tata Power shares were trading 5.45 per cent higher at Rs 41.60 per cent on the National Stock Exchange (NSE). The scrip touched an intraday high of Rs 42.20 against previous closing price of Rs 39.45.
In a filing to exchanges, Tata Group firm said on Monday it has taken over the management of Central Electricity Supply Utility of Odisha (CESU), after receiving the Letter of Intent (LOI) from the Odisha Electricity Regulatory Commission (OERC) for the distribution and retail supply of electricity in Odisha's five circles consisting of Bhubaneshwar, Cuttack, Puri, Paradeep and Dhenekal. Tata Power has received a license for 25 years.
As per order issued by the Odisha Electricity Regulatory Commission (OERC) on May 28, 2020, Tata Power will hold 51 per cent equity with management control and the state-owned Grid Corporation of Odisha (GRIDCO) will hold balance 49 per cent equity stake in TPCODL, it said in the exchange filing.
Commenting on the development, Praveer Sinha, CEO and MD, Tata Power said, "Our tie-up with CESU is a huge development for Tata Power. We are thankful to the Odisha Government and OERC for giving us this opportunity. We are committed to providing reliable, affordable, and quality power supply along with superior customer service, backed by innovative technology. We constantly strive to become the most preferred distribution company in the country. The success of our Delhi, Mumbai, and Ajmer Distribution businesses are a testament to this fact."
Spread over 30,000 qq km, CESU has five electrical circles comprising of the areas of Bhubaneswar (Electrical Circle - I and II), Cuttack, Paradeep and Dhenkanal with a population of over 1.4 crore and consumer base of 0.25 crore. With CESU, Tata Power aims to expand its consumer base to 5 million consumers from the present base of 0.25 crore across Mumbai, Delhi and Ajmer. The average demand of CESU is around 1,300 MW with the annual input energy of 8,400 MUs (FY 2018).